Supply Chain Fundamental Rethinking

A resurgent Indian Supply Chain post Covid-19 has been constrained due to Supply bottlenecks. Be it semiconductor shortage, increased reliance on few suppliers or moderately high input price inflation. The supply constrained Indian Supply Chain may have got itself further constrained with pressures due to the recent geopolitical events. History of such events is not a welcome news in the short to medium term. While I study the ever evolving scenario from an Indian Supply Chain worldview, I have at-least reached a few areas of my own understanding about the medium term impact of current geopolitical scenario, with outcomes of the events still not known. a. While the world focuses on supply constraints from Russia, Indian Supply Chains should also focus on supply originating from Ukraine. "Sunflower" , e.g., is where Ukraine holds 80% of world supply share. Sunflower oil is a large consumption item for Indians. Input price pressures shall dramatically increase for Indian Suppl...

Demand is the trigger for the Supply side of the Supply Chain. Supply side Strategies, Tactical plans & Operational execution activities are predominantly a function of the Demand side of the Supply Chain. The sanctity of the demand figure goes a long way in determining the performance of the Supply side. When it comes to accountability though, in many instances the Demand subordinates itself to the dynamics (or chaos!!) of the market place while Supply side is always the one which bears the brunt of not being able to meet the demand. More often than not, Supply side of the organization has experiences similar to what the Indian Healthcare system is experiencing at this very moment. I see a lot of analogies which can be leveraged to improve enterprise Supply Chains holistically. a. Demand is random but Supply is a Structure - Demand arises randomly, particularly if its a New Product. Responding to such cases the Supply side very efficiently develops new sources of supply, creates...

From a low of 20,000 in mid- February 2021 to 3,50,000 by April week 3.  Demand surge of Covid+ new cases is what Indian Healthcare Supply Chain is coping up with to keep its Patients get what they need. Demand Planning which is the trigger for the entire Supply side of the Supply Chain to organize itself to meet the market within its SLA's again has been found wanting in its (in)accuracy! And as it stands today in India, the Demand Planning accuracy seems to have been much lower than desired. A few key insights from the current stage of Covid-19 viewed from the lenses of Demand Planning, a. Never underestimate the importance of History - "This time its different" is a misnomer. Human history is of similar behaviours exhibited over multiple instances spread over different time periods. Historical data is a goldmine for Demand Planning. e.g. Relating this to Covid-19 - No time in the history of past 400 years of Pandemics (just 400 years as I did only study those 400 yea...

Amul is an exemplary example of a Milk business portfolio. The characteristic of that Supply Chain is predominantly standardized products, variety to a limited extent and more importantly, customers not being demanding about a personalized experience from the product consumption. Supply Chain is tuned to being a Push Supply Chain.   A Push Supply Chain Strategy is characterized by standardized SKUs made available in anticipation of demand. The strategy is deployed when the total lead time of Supply Chain is longer than the wait time available with the customer. Amul launched Pizza close to two decades back. Probably the total number of cities where Amul launched Amul Pizza (as a pilot) may have exceeded the total number of operational outlets that closest competitor may have had across the country.This was the scale of launch. Since then Pizza business has come to along way in India.  I have met so many people whom I ask this question - Do you know Amul sells Pizza? And ove...

"The felt need" of Supply Chain agility has been much lesser than "the perceived need of agility". Covid-19 is a black swan event which has provided the context for "perceived need to meet the felt need". Indigenous Supply Chains have done a fantastic job with that.   My research (from the published data) gives a soothing perspective that Indigenous Supply Chains have exhibited agility of great sorts. I appreciate the Supply Chain agility on the below parameters, a. Capacity alterations - Indian Supply Chains have shifted the existing production line to produce a completely different product. e.g. In case of India's largest FMCG company, the plant which used to produce "Perfumes" before Covid-19, has transformed itself into producing "Hand Sanitizers". Assuming that flexibility in production technology being the basis for the shift also needs to be viewed in the context on the Supply side of the Supply Chain being able to "fee...

An opportunity of a life time knocks only once in a life time! So when it knocks, making less than a dramatic use of the opportunity is a "Waste". Ones response to Covid-19 needs to be on those lines as a country or as an organization. Over the years, as opportunities for livelihood did rise in Urban areas, Rural population has come to Urban areas & settled down, in not so much of a great comfort but with some assurance of income. The demand on Urban infrastructure & the Supply Chain designs to meet that demand have kept increasing all the time. The World over and particularly in India, there has always been a talk about De-congesting the Urban area. In the pre-Covid-19 days this remained as an aspirational thought. There has been no great success with that thinking. The imbalances of Urban & Rural livelihood opportunities, which have been in favour of Urban, didn't create an ecosystem which makes a person leave the Urban land.  Covid-19 probably has offered t...

Supply Chains have evolved with the "West" as an anchor. It probably has its roots in Supply Chain as a term being coined in the West. Also over the years, Supply Chain leading practices have emerged out of the West as well as the Supply Chain thought leadership has rested with the West. A mix of all these & many more things has led the Indian thinking of Supply Chain be overshadowed by the West. And that has been a very contrasting story till NOW. Indians by nature are heuristically driven & most of the Indian Supply Chain professionals that I have met over my career have exhibited that they can handle the "state of flux" much better. Rather Indian Supply Chain professionals have less liking towards deterministic way of working. Contrasting to that over the decades, all efforts have been to move towards "planning for enhanced flexibility, responsiveness & agility". This has been through practices of planning systems, adoption of technolo...

Supply Chain leaders have reached the crossroad, much faster than expected! By the time, Supply Chains stabilized post the 2008 crises, it is time for a paradigm shift, again. There has been no time in the past which is so pressing for the need to "Realign the Supply Chains" as it stands now, particularly, if you are an India based Supply Chain.  My personal reading is that Realignment is not a jargon to be used but a reality to be embraced by the Supply Chain practitioners. "This time its different" will probably be a truth to be taken in your stride and not extend too much of "past" references into probable "future" Supply Chain. I see four reasons for the need to realign a) Impact of Trade Wars b) Impact of Indian Government Initiatives c) Surfacing of competition from unknown quarters d) Emerging technologies driving Supply Chain realignment In the recently held ET Edge Logistics & Supply Chain Summit, I spoke on Re...

Supply Chain Practitioners appreciate the need to improve Supply Chain performance and in all probability the improvements focus on "hard" aspects of Supply Chain like Network Redesign, Technology Applications, Infrastructure development so on and so forth. Supply Chain best practices are introduced to leverage on those for enhanced Supply Chain performance. The trap here is the structure for improvements is in place, the enablers are identified and the "facilitators" of that improvement are "assumed" to deliver on those. The failure of Supply Chain improvements is not so much to do with "hard" aspects as much as it has to do with "Soft" aspects. From my experience i am penning down a few thoughts on this area. A Supply Chain practitioner landed in Supply Chain, mostly, by accident. It is not by design that a large cross-section of Indian Supply Chain professionals are in Supply Chain. By academics very few are Supply Chain qualif...

What I and probably all folks in India are experiencing is something very divergent to how we grew up in Supply Chain & saw it getting shaped in India. My father tells me that when he bought his first Scooter, good 45 years back, he had to pay INR 5,000 & still wait for the scooter to be delivered at the convenience of the manufacturer. The Demand - Supply gap in Indian context of business favoured the Supply side. He did wait for 6 months to get the delivery of his scooter. Many of us have such stories to remember. A cultural pattern where supply was always constrained hence demand used to get tapered off. I think what Amazon or any e-tailer has done to Indians is that its permanently changed customers "Value System". And its happened way too fast! And Indian Supply Chains are yet to explicitly acknowledge it.   Indian customer traditionally has been unpredictable in his demand patterns, frugal in his budgets & very demanding on his delivery expectatio...

Indian Supply Chains had one of the most demanding year. CY 2017. Its been a year which needed nimble footed Supply Chains, it also needed Supply Chains which needed to appreciate that disruptions to Supply Chain don't only mean natural disruptions and it also meant that transitions to new way of working needs to evolve much faster than your own comfort. The year began with after effects of Demonetization.One of my agricultural industry clients which deals with Live Chicken had to face the challenges where the chicken is ready to be sold but the system couldn't have enough money to buy. Sales prices eroded and profits turned into losses in a matter of weeks. After effects of demonetization on FMCG/FMCD Supply Chain was drop in demand for a period which in 2017 eventually would go back. Many other examples can be quoted on Demonetization effect on Supply Chains in 2017. Automobile Sector Supply Chains of India had to also see a year where the shift from BS III to BS IV...